Gooooood morning traders. Seems like yesterday that I was banging away at these keys opening the pre-market thread. Have taken up the role for this week whilst @highlandlad and his highlandladdie are doing some father/son bonding on a road trip. Safe travels and make some wonderful memories together you guys.
Thanks to all the thread openers who come before and after me. Wow - how things have changed since I left at the beginning of 2019 to rejoin the outside world and especially so since the Coronavirus. I certainly enjoy spending my time doing things that make a difference and having face to face colleagues. Trading is a tough gig so congrats to those who are rising to the challenge. I see some familiar names and a lot of new ones too.
I have dipped my toe in the market from time to time but haven't had the time to devote the attention that it requires. Looking forward to nabbing a few trades this week and catching up with friends here.
Now for the news:-
The Australian share market was driven higher by big gains among bank stocks after the Federal Government announced it would loosen responsible lending laws as part of its economic recovery plan.
The benchmark S&P/ASX200 closed in on the key 6000 point mark, finishing 1.51 per cent higher at 5964.9, while the All Ordinaries Index rose 1.39 per cent to 6140.5.
A positive overnight lead from the US, as investors become more optimistic about the possibility of a COVID-19 stimulus bill, helped the local market.
But the banking sector was the main driver of the gains after Treasurer Josh Frydenberg said the lending laws changes would reduce the cost and time it took consumers and businesses to access credit so they could continue to spend, invest and create jobs.
Among the big four, Westpac was the strongest, surging 7.39 per cent to $17.58 after on Thursday copping a $1.3 billion penalty from AUSTRAC for breaching anti-money laundering and counter-terrorism financing laws.
ThinkMarkets Australia analyst Carl Capolingua said the certainty of having the settlement on the table had “tweaked someone’s model”.
National Australia Bank jumped 6.86 per cent to $18.37, ANZ added 6.28 per cent to $17.93 and Commonwealth Bank put on 3.01 per cent to $66.13.
Bendigo and Adelaide Bank lifted 4.76 per cent to $6.38, Bank of Queensland gained 2.81 per cent to $6.21 and Suncorp was up 1.78 per cent at $8.59.
Solomon Lew’s Premier Investments posted a 29 per cent surge in full-year net profit to $137.8 million, with its Peter Alexander sleepwear chain a standout performer, particularly around Mother’s Day.
But the company, which owns brands including Just Jeans, Portmans and Jay Jays, warned it would close up to 350 stores across Australia and New Zealand if landlords didn’t give enough COVID-19 rent relief. It has already decided to close four Smiggle stores in Hong Kong and 42 per cent of its UK Smiggle outlets.
Its shares slipped 0.68 per cent to $19.
BHP firmed 1.87 per cent to $37.60, and fellow mining heavyweight Rio Tinto appreciated 0.83 per cent to $98.
Bunnings and Officeworks owner Wesfarmers inched 0.31 per cent higher to $45.75, airline Qantas was 0.26 per cent higher at $3.88 and Telstra advanced 0.7 per cent to $2.86.
The Aussie dollar was buying 70.64 US cents, 55.36 British pence and 60.51 Euro cents in afternoon trade.
And in the US:- Some U.S. stocks could face more volatility next week as President Donald Trump and rival Joe Biden face off in their first debate ahead of a November election that betting services currently view as almost a coin flip.
A strong performance in Tuesday’s debate by Biden, who currently has a modest lead in betting odds and polls, might boost stocks related to global trade and renewable energy, while a perceived debate victory by Trump could benefit fossil fuel and defense companies.
The first of three scheduled debates comes at a fraught moment on Wall Street.
The S&P 500 tumbled around 10% from record highs in recent weeks before paring some of those losses on Friday, as investors worry about a prolonged recovery from the coronavirus and uncertainty related to the Nov. 3 presidential vote, including the possibility of a delay in announcing a winner.
If one candidate emerges stronger on Tuesday, “the debate could be an individual stock and sector play,” said Jack Ablin, Chief Investment Officer at Cresset Wealth Advisors.
“For example, I think life under Biden would be a lot simpler for Apple than life under Trump,” Ablin said, referring to Trump’s trade conflict with China.
Individual stocks and other assets have been susceptible to market moves as a result of debates, even as broader markets have generally shrugged them off.
The Sept. 26, 2016 debate between Trump and Hillary Clinton, for example, sparked a 2% surge in the Mexican peso, as well as moves in oil, gold and Treasuries, according to a University of Michigan and Dartmouth College study.
Many investors view Biden as more likely to raise taxes, and see a second term for Trump, who favors deregulation, as better for the overall stock market. At the same time, a Trump win could spark concerns over ramped up tensions between Washington and Beijing.
With expectations of a delayed vote count, the options market shows investors are bracing for volatility in November and December. Trump declined on Wednesday to commit to a peaceful transfer of power if he loses, and said he expected the election battle to end up before the Supreme Court.
Adding to political uncertainty, betting websites are offering odds giving Biden a 53% chance of beating Trump, down from as much as 61% in early August, according to RealClearPolitics.
A Biden win could boost the S&P 500 by about 1% the following day, while a Trump re-election would push the index down about 4%, according to an analysis by Cornerstone Macro based on a statistical comparison of recent asset prices and election betting odds.
“A possible interpretation of this result is that markets have increasingly priced in a Biden win and view the alternative as posing some risks, possibly stemming from potential escalating trade tensions or similar factors,” Cornerstone Marco wrote.
Gullane Capital Partners LLC, a hedge fund in Memphis, Tennessee, is focusing on each presidential candidate’s likely effect on specific stocks it owns, rather than what each candidate might mean for Wall Street as a whole, said Managing Partner Trip Miller.
“Biden is good for some of our businesses, like solar, and Trump is better for some of our other businesses that benefit from lighter regulation,” Miller said.
UBS in a report this week predicted that a second term for Trump would have little effect on healthcare. On the other hand, a Biden victory would lead to only modest changes, rather than a major overhaul of health insurance, even if Democrats took control of the Senate.
“We believe that the rhetoric on changes to healthcare policy exceeds the reality of what can be accomplished,” UBS analysts wrote.
Source: Reuters
Time to whittle away Winter and COVID-19 fat. Brekkie this morning is Mushroom Spinach Bacon Egg Cups and a The Best Green Smoothie. For vegos, skip the bacon. For vegans, skip the whole thing and go for the smoothie. You can get the recipes at https://www.ambitiouskitchen.com/
